Mumbai: State Bank of India chairman Rajnish Kumar, who gears up for the last leg of his term as the head of the country’s largest bank, believes that 2020 will be the best year as far as bad loan recoveries are concerned. Credit growth will, however, remain an issue, with the industry expecting a loan growth of just 7-8%, he believes. The government should take sector-specific steps to assist power distribution and telecom companies, Kumar said. Edited excerpts from an interview that spanned topics ranging from insolvency and his retirement to payment banks. Edited excerpts:

You had earlier said that 2020 will be a happy year in terms of credit growth and bad loan recoveries. What is your view now?

Seems so. At least with the recoveries that have happened and are happening. Non-performing assets (NPA) are alright. The credit growth numbers you have seen. There is an issue around credit growth particularly in the corporate sector. This year, growth estimates are coming around 7-8%. I think our credit growth will also be around that much.

However, there was expectation that credit growth revival will happen towards the second half of the financial year.

Retail is alright. Term loans are growing. Term loan growth year-on-year is 1.7 trillion. Working capital is a yearly phenomena. Last year, the bank had seen good disbursements and that helped us achieve high credit growth. Last year was 13%. Last year, we had seen large borrowers like NHAI (National Highways Authority of India) raising 25,000 crore. That’s why last year we came into positive territory. This year, we are still short and have negative growth from 1 April. The growth over the last three months is positive. Monthly growth is positive. Year-to-date growth is still 40,000 crore. With regard to working capital utilization, I wish corporates take more money for working capital needs. Then we are alright.

In the December policy, the Reserve Bank of India (RBI) governor quoting a survey said that capacity utilization is picking up. Do you see any signs of pick up?

If it picks up, it should reflect in the working capital utilization. As of now, it has not happened.

RBI also said that there should be more focus on industrial growth. What more can be done? Which are the sectors where you see signs of growth?

There is subdued activity. Only three sectors have proposals—roads, solar and city gas projects or oil and gas. Other than these three, there are not many proposals with SBI. (Seeing the) credit requirement for all proposals that are in the pipeline with SBI, there is no huge credit requirement. Because we have a large diversified portfolio, we cater to many industries. Renewals, enhancements are happening. The pace may be a tad slower than last year. Utilization and disbursements are still on hold. If the capacity utilization of industry improves, the numbers will start looking better.

Do you see services companies such as Jet Airways going into liquidation?

We have left it to the RP (resolution professional). He is putting in that effort. If the RP has decided that we have to go for one more round of bidding, there must be something in mind. We should make one more attempt.

Are you seeing a drop in referrals to the National Company Law Tribunal (NCLT)?

The speed will come down now. A lot of cases, nearly 10,000 of them, are in NCLT. However, the pace of referrals will come down. There are not many cases now that are 1,500 crore and above.

What more steps do you expect from the government and RBI to revive growth?

Monetary or fisc should move in coordination. It should not be one or the other. Others have to move in tandem. Some sector-specific steps are required. We have issues around discoms in the power sector. For the real estate sector, we have set up the real estate fund. Telecom issues need to be sorted out. I believe that apart from the monetary and fiscal measures that government may take in the budget to boost demand, addressing the sector specific issues will also be important.

When is Jio Payment Bank going to take off?

We are not spending too much time on that. We have a board seat. We have certain obligations. However, I think it will be another few quarters before it takes off.

Will NPA recoveries be better in 2020?

Accounts that can make a big difference are more or less in the advanced stage of resolution. Jaypee Infratech, power sector, we will be clear by 31 March. In terms of recoveries, these two quarters are going to be the best. 2018 was the best year in terms of NPA provisions. 2020 will be best year in terms of recoveries. 2021 onwards, unless there is any major shock, things will be normal.

You are going to retire next year. Do you think you have achieved whatever you had set out to do?

From a balance sheet perspective and profit and loss perspective, largely yes. In terms of digitization, lot has happened. Quite a lot of action happened on human resources.

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